402 Cohen Hall
Michigan Society of Fellows
Center for the Study of Complex Systems
University of Michigan
Lynette Shaw received her Ph.D. in Sociology from the University of Washington in Summer 2016. Her dissertation research focused on social constructions of value in the rise of digital currencies such as Bitcoin and utilized a combination of agent-based modeling, automated analysis of text scraped from online communities and news, and quantitative analyses of metrics surrounding Bitcoin's price and investment trends. In addition to her continuing work on new digital currencies, she also has undertaken a series of projects related to modeling the emergence of cultural dynamics and shared social realities (i.e. social construction) out of the individual-level, cognitive processes responsible for automatic sense-making in situations (i.e. mental representation).
Title: What's a Bitcoin Worth? Valuation and Categorization in the Rise of Cryptocurrency
Abstract: The first posted exchange rate for Bitcoin in 2009 was around $0.001 (USD) = 1 BTC. Just over eight years later, in mid-December 2017, it reached a previously inconceivable high of over $19,000 (USD) = 1 BTC, only to lose over 80% of its value the following year. Along with this dramatic ride in its price came a new wave of attention from mainstream audiences who brought with them a lot of questions - the two biggest being ‘What is Bitcoin?’ and ‘Why is it worth anything?’
This talk will offer some answers to these questions from a sociological perspective. The first part will use a computational modeling approach to help clarify how it is that this “something out of nothing” quality can arise out of social valuation processes. The second part will apply existing theories of categorization and market valuation to empirical evidence from the documented history of Bitcoin’s development, venture capital funding trends, and text scraped from thousands of news articles to explore the role different groups’ definitions of Bitcoin have played in constituting its current level of value and what this might entail for cryptocurrency’s future.